Rents the borrower pays - time consuming to check

[Guest]

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[Mette]

It seems to me that the rent has gone up, up, up and up. And compared to other local organisations the rent is very high. In general around 30% (I cannot recognise from my own searches the average on 22% that is listed on the website). If this does not change it will undermine KIVA efforts. The only way to control this is probably if each of us very carefully checks the rent before lending - leaving those field partners with rent around the 30% out in the cold.

At the same time it is quite time consuming to check the rate. I have to click on more, click on field partner, scroll down - and then back each and every time.

Pls. let us see the rent from the page about the lender. You have a column to the right about the Field Partner, but only showing success rates.

I would be happy to read comments :-)

[waywardcats]

It seems to me that the rent has gone up, up, up and up. And compared to other local organisations the rent is very high. In general around 30% (I cannot recognise from my own searches the average on 22% that is listed on the website). If this does not change it will undermine KIVA efforts. The only way to control this is probably if each of us very carefully checks the rent before lending - leaving those field partners with rent around the 30% out in the cold.

At the same time it is quite time consuming to check the rate. I have to click on more, click on field partner, scroll down - and then back each and every time.

Pls. let us see the rent from the page about the lender. You have a column to the right about the Field Partner, but only showing success rates.

I would be happy to read comments :-)

Hi Mette and  to Kiva Friends!

I agree that it would be very interesting to see the interest rate that the borrower is paying on the loan page, and I am certain that Kiva could move that field onto the loan page from the Field Partner pages.  However, since the rate shown is an average rate for the Field Partner it is really only a guide, and not very accurate at indicating the actual rate any individual entrepreneur would be paying.  As long as it continues to be clearly marked as an average rate then it should not be too confusing to lenders and you are certainly right that it would save some research time.

-Kerry-

[RichardF]

Hi Mette,
I support your suggestion! 

Back in October 2008, Matt Flannery signed on to the MFTransparency  "Endorser Statement."

"I endorse the dual mission of MFTransparency to:

Facilitate the collection and dissemination of transparent microcredit product pricing information.
Educate stakeholders and enhance their understanding of microcredit product pricing.

I encourage all who are involved in the microfinance industry to support these principles."

I believe including effective annual percentage rates for the loans on individual business profiles is in the spirit of this endorsement.  Averages are fine for Field Partners, but the MFTransparency initiative is based on verifications using specific loan payment schedules.  Posting enough information about Kiva loan repayment schedules to calculate comparable percentage rates would go a long way to follow through on Kiva's endorsement of the effort.

[granite]

I've noticed several loans recently have a increasing repayment rate.  ie first payment 10 then 12 then 15 etc....  I'm now wondering if this is because the borrower pays back a fixed amount and Kiva gets back the principle which is what is reflected in the payment schedule.  (The interest going to the MFI).  Hmmmmm I wonder if I could do some math to see if this makes sense.

Anyways... I agree.... actual interest rates should posted averages and n/a's make it difficult to make informed decision.  The conspiracy theory guru in me wants to think this is intentional as many new lenders would be turned off to learn there is 20% (pick your limit) or above interest being charged on the loan.  If most people are like me it's after doing a few loans first, then figuring out interest is being charged and then seeing the credit card like rates on some of the loans.  Only by being already invested and rationalizing the need for MFI interest rates above single digit interest rates, and not frequently looking at the interest rates am I still somehow still content on lending.

[wthepoo]

Hmmmmm I wonder if I could do some math to see if this makes sense.

RichardF has done so for a couple of loans a while back: http://www.kivafriends.org/index.php/topic,2995.msg48214.html#msg48214

With quite interesting results, actually.

Best wishes,
Wolfgang.